Intrinsic value of Fortress Transportation&Infrastructure I - FTAI

Previous Close

$17.18

  Intrinsic Value

$3.14

stock screener

  Rating & Target

str. sell

-82%

  Value-price divergence*

-54%

Previous close

$17.18

 
Intrinsic value

$3.14

 
Up/down potential

-82%

 
Rating

str. sell

 
Value-price divergence*

-54%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FTAI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.76
  45.20
  41.18
  37.56
  34.31
  31.38
  28.74
  26.36
  24.23
  22.30
  20.57
  19.02
  17.62
  16.35
  15.22
  14.20
  13.28
  12.45
  11.70
  11.03
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
Revenue, $m
  149
  216
  305
  420
  564
  741
  954
  1,206
  1,498
  1,832
  2,209
  2,630
  3,093
  3,599
  4,146
  4,735
  5,363
  6,031
  6,737
  7,480
  8,261
  9,077
  9,931
  10,820
  11,747
  12,711
  13,713
  14,755
  15,838
  16,963
  18,132
Variable operating expenses, $m
 
  250
  348
  475
  634
  829
  1,064
  1,341
  1,663
  2,032
  2,448
  2,899
  3,410
  3,967
  4,571
  5,220
  5,913
  6,649
  7,427
  8,247
  9,107
  10,008
  10,948
  11,929
  12,951
  14,013
  15,118
  16,267
  17,461
  18,701
  19,990
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  190
  250
  348
  475
  634
  829
  1,064
  1,341
  1,663
  2,032
  2,448
  2,899
  3,410
  3,967
  4,571
  5,220
  5,913
  6,649
  7,427
  8,247
  9,107
  10,008
  10,948
  11,929
  12,951
  14,013
  15,118
  16,267
  17,461
  18,701
  19,990
Operating income, $m
  -41
  -34
  -43
  -55
  -70
  -88
  -110
  -135
  -165
  -199
  -238
  -269
  -317
  -369
  -425
  -485
  -550
  -618
  -690
  -767
  -847
  -930
  -1,018
  -1,109
  -1,204
  -1,303
  -1,405
  -1,512
  -1,623
  -1,738
  -1,858
EBITDA, $m
  24
  63
  89
  122
  165
  216
  278
  352
  437
  534
  644
  767
  902
  1,049
  1,209
  1,380
  1,564
  1,758
  1,964
  2,181
  2,408
  2,646
  2,895
  3,154
  3,425
  3,706
  3,998
  4,302
  4,617
  4,945
  5,286
Interest expense (income), $m
  13
  13
  24
  38
  56
  80
  108
  143
  183
  231
  285
  346
  413
  488
  570
  658
  754
  855
  963
  1,077
  1,197
  1,323
  1,455
  1,593
  1,737
  1,886
  2,042
  2,204
  2,372
  2,547
  2,729
Earnings before tax, $m
  -40
  -47
  -67
  -93
  -126
  -167
  -218
  -278
  -349
  -430
  -523
  -615
  -730
  -857
  -995
  -1,144
  -1,303
  -1,473
  -1,653
  -1,844
  -2,044
  -2,253
  -2,473
  -2,702
  -2,940
  -3,189
  -3,447
  -3,716
  -3,995
  -4,286
  -4,587
Tax expense, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -20
  -47
  -67
  -93
  -126
  -167
  -218
  -278
  -349
  -430
  -523
  -615
  -730
  -857
  -995
  -1,144
  -1,303
  -1,473
  -1,653
  -1,844
  -2,044
  -2,253
  -2,473
  -2,702
  -2,940
  -3,189
  -3,447
  -3,716
  -3,995
  -4,286
  -4,587

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,547
  2,142
  3,024
  4,160
  5,587
  7,340
  9,450
  11,941
  14,834
  18,143
  21,875
  26,035
  30,622
  35,629
  41,052
  46,879
  53,104
  59,714
  66,704
  74,064
  81,789
  89,875
  98,323
  107,131
  116,305
  125,849
  135,774
  146,089
  156,808
  167,948
  179,525
Adjusted assets (=assets-cash), $m
  1,479
  2,142
  3,024
  4,160
  5,587
  7,340
  9,450
  11,941
  14,834
  18,143
  21,875
  26,035
  30,622
  35,629
  41,052
  46,879
  53,104
  59,714
  66,704
  74,064
  81,789
  89,875
  98,323
  107,131
  116,305
  125,849
  135,774
  146,089
  156,808
  167,948
  179,525
Revenue / Adjusted assets
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
Average production assets, $m
  1,069
  1,551
  2,190
  3,013
  4,047
  5,316
  6,844
  8,649
  10,744
  13,140
  15,844
  18,857
  22,178
  25,805
  29,732
  33,953
  38,461
  43,249
  48,311
  53,642
  59,237
  65,094
  71,212
  77,592
  84,236
  91,149
  98,337
  105,808
  113,572
  121,640
  130,025
Working capital, $m
  97
  42
  60
  82
  110
  145
  186
  235
  292
  357
  431
  513
  603
  702
  809
  923
  1,046
  1,176
  1,314
  1,459
  1,611
  1,770
  1,936
  2,110
  2,291
  2,479
  2,674
  2,877
  3,088
  3,308
  3,536
Total debt, $m
  260
  480
  774
  1,152
  1,628
  2,211
  2,914
  3,743
  4,707
  5,809
  7,052
  8,437
  9,964
  11,632
  13,437
  15,378
  17,450
  19,652
  21,979
  24,430
  27,003
  29,696
  32,508
  35,442
  38,496
  41,675
  44,980
  48,415
  51,984
  55,694
  59,549
Total liabilities, $m
  494
  713
  1,007
  1,385
  1,861
  2,444
  3,147
  3,976
  4,940
  6,042
  7,285
  8,670
  10,197
  11,865
  13,670
  15,611
  17,683
  19,885
  22,212
  24,663
  27,236
  29,929
  32,741
  35,675
  38,729
  41,908
  45,213
  48,648
  52,217
  55,927
  59,782
Total equity, $m
  1,054
  1,429
  2,017
  2,775
  3,727
  4,896
  6,303
  7,965
  9,894
  12,101
  14,591
  17,366
  20,425
  23,765
  27,381
  31,269
  35,420
  39,830
  44,491
  49,400
  54,553
  59,947
  65,581
  71,456
  77,575
  83,941
  90,561
  97,441
  104,591
  112,021
  119,743
Total liabilities and equity, $m
  1,548
  2,142
  3,024
  4,160
  5,588
  7,340
  9,450
  11,941
  14,834
  18,143
  21,876
  26,036
  30,622
  35,630
  41,051
  46,880
  53,103
  59,715
  66,703
  74,063
  81,789
  89,876
  98,322
  107,131
  116,304
  125,849
  135,774
  146,089
  156,808
  167,948
  179,525
Debt-to-equity ratio
  0.247
  0.340
  0.380
  0.420
  0.440
  0.450
  0.460
  0.470
  0.480
  0.480
  0.480
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -20
  -47
  -67
  -93
  -126
  -167
  -218
  -278
  -349
  -430
  -523
  -615
  -730
  -857
  -995
  -1,144
  -1,303
  -1,473
  -1,653
  -1,844
  -2,044
  -2,253
  -2,473
  -2,702
  -2,940
  -3,189
  -3,447
  -3,716
  -3,995
  -4,286
  -4,587
Depreciation, amort., depletion, $m
  65
  97
  132
  177
  234
  304
  388
  487
  602
  734
  882
  1,036
  1,219
  1,418
  1,634
  1,866
  2,113
  2,376
  2,654
  2,947
  3,255
  3,577
  3,913
  4,263
  4,628
  5,008
  5,403
  5,814
  6,240
  6,683
  7,144
Funds from operations, $m
  29
  50
  66
  85
  108
  136
  170
  209
  253
  304
  360
  421
  488
  561
  639
  722
  810
  903
  1,001
  1,104
  1,211
  1,323
  1,440
  1,562
  1,688
  1,819
  1,956
  2,098
  2,245
  2,398
  2,557
Change in working capital, $m
  -2
  13
  17
  22
  28
  35
  42
  49
  57
  65
  74
  82
  90
  99
  107
  115
  123
  130
  138
  145
  152
  159
  166
  173
  181
  188
  195
  203
  211
  219
  228
Cash from operations, $m
  31
  37
  48
  62
  80
  102
  128
  160
  196
  238
  286
  339
  398
  462
  532
  607
  688
  773
  863
  959
  1,059
  1,164
  1,274
  1,388
  1,507
  1,631
  1,760
  1,894
  2,034
  2,179
  2,329
Maintenance CAPEX, $m
  0
  -59
  -85
  -120
  -166
  -222
  -292
  -376
  -475
  -590
  -722
  -871
  -1,036
  -1,219
  -1,418
  -1,634
  -1,866
  -2,113
  -2,376
  -2,654
  -2,947
  -3,255
  -3,577
  -3,913
  -4,263
  -4,628
  -5,008
  -5,403
  -5,814
  -6,240
  -6,683
New CAPEX, $m
  -276
  -483
  -639
  -823
  -1,034
  -1,270
  -1,528
  -1,804
  -2,095
  -2,396
  -2,704
  -3,013
  -3,322
  -3,627
  -3,927
  -4,221
  -4,508
  -4,788
  -5,062
  -5,331
  -5,595
  -5,857
  -6,118
  -6,380
  -6,644
  -6,913
  -7,188
  -7,471
  -7,764
  -8,068
  -8,385
Cash from investing activities, $m
  -213
  -542
  -724
  -943
  -1,200
  -1,492
  -1,820
  -2,180
  -2,570
  -2,986
  -3,426
  -3,884
  -4,358
  -4,846
  -5,345
  -5,855
  -6,374
  -6,901
  -7,438
  -7,985
  -8,542
  -9,112
  -9,695
  -10,293
  -10,907
  -11,541
  -12,196
  -12,874
  -13,578
  -14,308
  -15,068
Free cash flow, $m
  -182
  -504
  -676
  -881
  -1,119
  -1,390
  -1,692
  -2,021
  -2,374
  -2,748
  -3,140
  -3,544
  -3,960
  -4,383
  -4,813
  -5,247
  -5,686
  -6,128
  -6,575
  -7,026
  -7,483
  -7,948
  -8,421
  -8,904
  -9,400
  -9,910
  -10,436
  -10,980
  -11,544
  -12,130
  -12,740
Issuance/(repayment) of debt, $m
  -50
  220
  294
  378
  475
  584
  702
  830
  963
  1,102
  1,243
  1,385
  1,527
  1,668
  1,806
  1,941
  2,073
  2,201
  2,327
  2,451
  2,572
  2,693
  2,813
  2,933
  3,055
  3,178
  3,305
  3,435
  3,570
  3,709
  3,855
Issuance/(repurchase) of shares, $m
  0
  489
  655
  850
  1,078
  1,337
  1,625
  1,940
  2,278
  2,637
  3,012
  3,390
  3,789
  4,197
  4,611
  5,031
  5,455
  5,883
  6,315
  6,753
  7,196
  7,647
  8,107
  8,577
  9,059
  9,555
  10,067
  10,596
  11,145
  11,716
  12,309
Cash from financing (excl. dividends), $m  
  -31
  709
  949
  1,228
  1,553
  1,921
  2,327
  2,770
  3,241
  3,739
  4,255
  4,775
  5,316
  5,865
  6,417
  6,972
  7,528
  8,084
  8,642
  9,204
  9,768
  10,340
  10,920
  11,510
  12,114
  12,733
  13,372
  14,031
  14,715
  15,425
  16,164
Total cash flow (excl. dividends), $m
  -214
  205
  273
  348
  434
  530
  636
  749
  868
  991
  1,116
  1,231
  1,357
  1,481
  1,604
  1,724
  1,841
  1,956
  2,068
  2,177
  2,285
  2,392
  2,499
  2,606
  2,714
  2,824
  2,936
  3,052
  3,171
  3,295
  3,425
Retained Cash Flow (-), $m
  112
  -489
  -655
  -850
  -1,078
  -1,337
  -1,625
  -1,940
  -2,278
  -2,637
  -3,012
  -3,390
  -3,789
  -4,197
  -4,611
  -5,031
  -5,455
  -5,883
  -6,315
  -6,753
  -7,196
  -7,647
  -8,107
  -8,577
  -9,059
  -9,555
  -10,067
  -10,596
  -11,145
  -11,716
  -12,309
Prev. year cash balance distribution, $m
 
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -216
  -382
  -503
  -644
  -806
  -989
  -1,191
  -1,411
  -1,646
  -1,897
  -2,159
  -2,433
  -2,716
  -3,007
  -3,307
  -3,613
  -3,927
  -4,247
  -4,575
  -4,911
  -5,255
  -5,608
  -5,971
  -6,345
  -6,732
  -7,131
  -7,545
  -7,974
  -8,420
  -8,884
Discount rate, %
 
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
 
  -204
  -340
  -419
  -499
  -577
  -649
  -711
  -761
  -795
  -813
  -813
  -797
  -765
  -720
  -665
  -602
  -535
  -466
  -398
  -333
  -273
  -219
  -172
  -132
  -99
  -72
  -52
  -36
  -24
  -16
Current shareholders' claim on cash, %
  100
  71.0
  51.6
  38.3
  29.0
  22.4
  17.6
  14.0
  11.4
  9.3
  7.7
  6.5
  5.5
  4.7
  4.1
  3.5
  3.1
  2.7
  2.4
  2.1
  1.9
  1.7
  1.5
  1.4
  1.3
  1.1
  1.0
  0.9
  0.9
  0.8
  0.7

Fortress Transportation and Infrastructure Investors LLC owns and acquires infrastructure and related equipment for the transportation of goods and people in Africa, Asia, Europe, South America, and North America. It operates in five segments: Aviation Leasing, Offshore Energy, Shipping Containers, Jefferson Terminal, and Railroad. The Aviation Leasing segment owns and manages 60 aviation assets, including 18 commercial passenger aircraft and 42 commercial jet engines. The Offshore Energy segment owns and leases vessels and equipment that support offshore oil and gas activities, including one anchor handling towing supply (AHTS) vessel and one remote operated vehicle (ROV) support vessel. The Shipping Containers segment engages in the acquisition and leasing of shipping containers on an operating lease and finance lease basis, which comprise interests in approximately 138,000 maritime shipping containers and related equipment. The Jefferson Terminal segment develops crude oil and refined products handling terminal at the Port of Beaumont, Texas; and other related assets involved in the transportation and processing of crude oil and related products. The Railroad segment owns a short line railroad that operates from Maine to Montreal, primarily transporting pulp and paper, construction products, and chemicals. The company serves operators of transportation and infrastructure networks, including airlines, offshore energy service providers, and shipping lines. Fortress Transportation and Infrastructure Investors LLC was founded in 2011 and is based in New York, New York.

FINANCIAL RATIOS  of  Fortress Transportation&Infrastructure I (FTAI)

Valuation Ratios
P/E Ratio -65.1
Price to Sales 8.7
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 42
Price to Free Cash Flow -5.3
Growth Rates
Sales Growth Rate 8.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.5%
Cap. Spend. - 3 Yr. Gr. Rate 25.7%
Financial Strength
Quick Ratio NaN
Current Ratio 1.1
LT Debt to Equity 24.7%
Total Debt to Equity 24.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -0.4%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -1.5%
Ret/ On T. Cap. - 3 Yr. Avg. -0.4%
Return On Equity -1.8%
Return On Equity - 3 Yr. Avg. -0.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 88.6%
Gross Margin - 3 Yr. Avg. 89.1%
EBITDA Margin 25.5%
EBITDA Margin - 3 Yr. Avg. 34.5%
Operating Margin -27.5%
Oper. Margin - 3 Yr. Avg. -21%
Pre-Tax Margin -26.8%
Pre-Tax Margin - 3 Yr. Avg. -13.5%
Net Profit Margin -13.4%
Net Profit Margin - 3 Yr. Avg. -2.8%
Effective Tax Rate -2.5%
Eff/ Tax Rate - 3 Yr. Avg. 6.3%
Payout Ratio -500%

FTAI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTAI stock intrinsic value calculation we used $149 million for the last fiscal year's total revenue generated by Fortress Transportation&Infrastructure I. The default revenue input number comes from 2016 income statement of Fortress Transportation&Infrastructure I. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FTAI stock valuation model: a) initial revenue growth rate of 45.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.7%, whose default value for FTAI is calculated based on our internal credit rating of Fortress Transportation&Infrastructure I, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Fortress Transportation&Infrastructure I.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FTAI stock the variable cost ratio is equal to 118.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FTAI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.9% for Fortress Transportation&Infrastructure I.

Corporate tax rate of 27% is the nominal tax rate for Fortress Transportation&Infrastructure I. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FTAI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FTAI are equal to 717.1%.

Life of production assets of 18.2 years is the average useful life of capital assets used in Fortress Transportation&Infrastructure I operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FTAI is equal to 19.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1054 million for Fortress Transportation&Infrastructure I - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 74.55 million for Fortress Transportation&Infrastructure I is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Fortress Transportation&Infrastructure I at the current share price and the inputted number of shares is $1.3 billion.

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COMPANY NEWS

▶ Fortress Transportation posts 2Q loss   [Aug-05-17 01:10AM  Associated Press]
▶ Fortress Transportation posts 1Q loss   [May-05-17 05:02AM  Associated Press]
▶ Fortress Transportation posts 4Q loss   [Feb-23-17 06:57PM  Associated Press]
▶ This Is How Smart Money Is Trading Kaman Corporation (KAMN)   [Nov-22  02:07PM  at Insider Monkey]
Stock chart of FTAI Financial statements of FTAI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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